This years major accomplishments are in the following areas: 1) Lmx1a is negatively regulated by Lmo4 in inner ear development (manuscript in preparation) Lmx1a encodes a LIM-domain transcription factor (LIM-HD). In both Drosophila and mammals, Lim-only proteins, Lmo, have been shown to negatively regulate LIM-HD functions by competing with LIM-HD for binding to transcription complexes. Inner ears of Lmx1a nulls (dreher) are rudimentary in structure with a small cochlear duct and no apparent endolymphatic duct and canal formation. However, most of the sensory organs, though fused, are distinguishable within the membranous epithelium. In contrast, inner ears of Lmo4 nulls lack the three semicircular canals and their associated sensory organs, cristae. Additionally, the organ of Corti is duplicated within the cochlea. Given these reported phenotypes, it is not immediately apparent how Lmx1a and Lmo4 might interact with each other during inner ear development. Nevertheless, our genetic studies of Lmx1a and Lmo4 compound mutants indicate that there are multiple sites where Lmo4 negatively regulates Lmx1a functions and where Lmo4 and Lmx1a are independently required. Lmo4 negatively regulates Lmx1a in crista formation, whereas Lmx1a and Lmo4 are sequentially required for canal formation. In the cochlea, Lmo4 negatively regulates Lmx1a to restrict the organ of Corti formation but Lmx1a is also independently required in proper hair cell formation in the basal cochlea. 2) Dual roles of Bone morphogenetic protein 2 in semicircular canal formation (manuscript in review) In the inner ear, the three semicircular canals and their associated sensory organs, cristae are responsible for detecting angular head movements. Based on our previous studies in chicken, we proposed that secreted ligands in the presumptive crista mediate canal formation by inducing a canal genesis zone in the canal pouch. This induction was postulated to involve the upregulation of Bone morphogenetic protein 2 (Bmp2) in the canal genesis zone. Fate mapping experiments using lipophilic dye indicate that cells in canal genesis zone give rise to most of the cells in the canals and only some of the cells in the common crus (a tubular structure that connects the anterior and posterior canal). To test this hypothesis, we investigated the role of Bmp2 in canal formation in mice by generating conditional knockout of Bmp2 in the developing mouse inner ear. The phenotypes of intact common crus and ampullae (housing the sensory cristae) but absence of the three semicircular canals only are entirely consistent with the canal genesis hypothesis. Furthermore, we provided genetic evidence that Bmp2 has dual roles in regulating canal formation: it promotes proliferation of canal epithelia as well as inhibits the resorption role of Netrin1 during canal formation. In the past year, we investigated the cellular nature of the negative regulation between Bmp2 and Netrin1 by examining the transducer of Bmp2 signaling, phosphorylated Smad, in Netrin1 knockout mice and quantify Netrin1 gene expression in Bmp2 conditional knockouts using quantitative PCR. These experiments are currently ongoing. 3) Cross-inhibition of retinoic acid and Fibroblast growth factor in semicircular canal formation (manuscript in review) The anterior and posterior semicircular canals of the inner ear are derived from an epithelial outpocket of the developing inner ear known as the vertical canal pouch. As the canal pouch grows, the epithelia in two regions of the canal pouch in the center approach each other to form two fusion plates, in which the cells resorb and disappear. As a result, the remaining rim of the canal pouch develops into the anterior and posterior canals. The center of the canal pouch, spanned by the two resorption domains, also remains and forms a tube-like structure known as the common crus, which connects the anterior and posterior canals. It is not clear how each of these domains is specified at the canal pouch stage during development. Here, we show that Raldh2 and Raldh3 (encode retinoic acid synthesizing enzymes) expressed in the center of the chicken canal pouch dictate common crus formation. This retinoic acid signaling also antagonizes Fibroblast growth factor signaling required for canal formation at the rim of the canal pouch. 4) Pou3f4-mediated regulation of ephrin-B2 controls temporal bone development in the mouse (manuscript accepted) Mutations of POU3F4 are associated with DFNX2, a X-linked non-syndromic form of deafness that is characterized by both conductive and sensorineural deficits. The conductive deficits are associated with stapes fixation and a phenomenon described as perilymphatic gusher, a profuse discharge of perilymph upon stapes removal. Despite the causal link of POU3F4 mutations to DFNX2 discovered fifteen years ago, the molecular mechanisms underlying this middle ear defect are not known. We discovered that Pou3f4 knockout and Ephrin-b2 conditional knockout mice show a similar phenotype of the failure of the stapes and styloid process to separate during development. Based on phenotypic and gene expression analyses of these mutants as well as chromatin-immunoprecipitation results, we provided evidence that Ephrin-b2 is a downstream target of Pou3f4 in stapes formation. 5) Ephrin-B2 governs morphogenesis of endolymphatic sac and duct epithelia in the mouse inner ear (manuscript published) Ephrins and Eph are bidirectional-signaling molecules that mediate a broad range of cellular processes such as cell migration, boundary formation and neuronal pathfinding. A number of Ephrins (ligands) and Ephs (receptors) are expressed during inner ear development but their functions remain elusive. Here, we show that Ephrin-b2 is involved in the proper partitioning of the dorsal otic region into the endolymphatic sac/duct primordium on the medial side and the canal pouch that eventually develops into the anterior and posterior canals on the lateral side. In the absence of Ephrin-b2, the development of the endolymphatic duct/sac is abnormal resulting in an expanded endolymphatic sac and little ductal tissue.